SECTION 10: HUD Addendum
Ten-year coverage Structural defect is actual physical damage to the designed load-bearing portions of a home caused by failure of such load-bearing portions that affects their load-bearing functions to the extent that the home becomes unsafe, unsanitary, or otherwise unlivable. Load-bearing components, for the purpose of defining structural defects, are defined as follows: footing and foundation systems; beams; girders; lintels; columns; load-bearing walls and partitions; roof framing systems; and floor systems, including basement slabs for the first through fourth years where the home is located in an area designated by HUD regulations on the effective date of this Limited Warranty as containing expansive or collapsible soils (HUD has designated the State of Colorado as such an area). In those situations where HUD, VA, or other applicable laws or regulations require insurance backing, the Builder is insured by a member of the Zurich-American Insurance Group (“Insurer”) for its obligations arising from this Limited Warranty to benefit the Homeowner should the Builder not perform its obligations as contained in this Limited Warranty. The Limited Warranty coverage for basement floor slabs in the State of Colorado is extended from the first through the fourth year. The following language is added to Section 7 of the Limited Warranty The Homeowner of a home with original FHA/VA financing is not required to submit disputes related to or arising out of this Limited Warranty to the Binding Arbitration procedure available here; however, if the Homeowner elects to pursue the dispute to a final resolution, including judicial resolution of disputes, such election shall bar the Homeowner from pursuing the same dispute against this Limited Warranty through the Binding Arbitration procedure provided herein.
The following language is added to Section 3 of the Limited Warranty The effective date will be the date on which closing or settlement occurs in connection with the initial sale of the home. In no event will the effective date be later than the date of FHA endorsement of your mortgage on the home. Notwithstanding anything to the contrary herein contained, during the first year of coverage, the Builder will correct Construction Deficiencies in workmanship and materials resulting from the failure of the home to comply with the standards of quality as measured by acceptable trade practices. Construction Deficiencies are defects (not of a structural nature) in the home that are attributable to poor workmanship or to the use of inferior materials, which result in the impaired functioning of the home or some part thereof. Defects resulting from abuse by the Homeowner or someone else or from normal wear and tear are not considered Construction Deficiencies. The Homeowner may ask for a review and resolution of a disputed claim by HUD prior to engaging in arbitration.
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